This is a rush transcript from "Hannity," May 8, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Farmers in California, they're losing their land, crops, and their livelihood, all because of a 2-inch fish. Ainsley Earhardt brings us this special investigation.


AINSLEY EARHARDT, FOX NEWS CORRESPONDENT (voice-over): California's Central Valley is considered by many to be the richest and most productive farmland in the nation. But this land is being threatened by the small, harmless-looking minnow called the delta smelt.

Recently, it landed on the endangered species list, causing a federal court to shut down vital pumps to farmers to help preserve it.

Video: Watch the special investigation

SARAH WOOLF, WESTLANDS WATER DISTRICT: This is the pumping station. And it is pumped out of the delta here and brought into this canal system that makes its way. And there's actually two that go along together.

Sarah Woolf is a spokesperson for the Westlands Water District, a company that oversees the manmade, complicated water delivery system in the Central Valley.

(on camera) How many years has this been a process?

WOOLF: It was completed in 1968.

EARHARDT: Decades.


EARHARDT: All of the farmers along all of this land, 2/3 of the state OF California have depended on water for their crops.


EARHARDT: The water is turned off here, so none of these farmers can expect to get any water.

WOOLF: That is correct.

EARHARDT (on camera): Two years ago, I wouldn't have been able to do this. This was a canal full of gushing water irrigating the farmland here in the San Joaquin Valley. But as you can see, it is all dried up. The pumps were turned off after environmentalists won a federal court case. But at least one lawmaker in Washington is fighting back.

REP. DEVIN NUNES (R-CALIF.): You're spending $1 trillion and you will not put in one provision that would create — save 60,000 jobs. This is an insult to my constituency.

What we have today is a manmade brought on by laws, passed by Congress, to where we're starting the breadbasket of the world and starving it of water to save little fish, which is outrageous.

EARHARDT: Green groups claim the smelt are critical to the delta's ecosystem, and if the delta's fragile ecosystem were to fail, so would the state's main water source.

NOAH GARRISON, NRDC: If we allow the delta to become polluted or to lose — or for the help of that ecosystem to collapse, we lose the supply of water for 23 million people.

EARHARDT: But this argument offers little solace to farmers who have watched their land go from this to this.

KOLE LIPTON, FARMER: This is our lifeline. And, you know, it was a promise by the government. We have kept our word. This Congress has reneged on their agreements and their promises.

EARHARDT: Kole Lipton is a third- generation almond farmer here, and he argues that the American consumer should get ready for produce prices to soar and food scares to become a common occurrence.

LIPTON: Very simply. I would say, do you want to depend for your food supply on a foreign country? If you think you have problems now with salmonella and finding out what part of the United States it came from, think of the problem if you have a food scare and your food is being imported from South America or China.

EARHARDT: Representative Nunes estimate 37,000 jobs have been lost due to the smelt issue and that number is rising higher by that day. In one town in California, unemployment is up to an astonishing 40 percent.

I can see the tears in your eyes.

TERRY INCH, FARM WORKER: I'll cry. This does not make me happy. Nobody wants this.

EARHARDT: What’s going through your mind?

INCH: I want a job. We don't have water, we don't have jobs.

EARHARDT (on camera): Stressful?

INCH: Yes. It hurts. Nobody likes a handout.


HANNITY: Joining us now is Ainsley Earhardt. I can't believe this. Because of this little fish, up to 80,000 people are going to lose jobs. There's just enough water for farms that have been there for, what, generations?

EARHARDT: Generations. Third-general farmers, Sean. Their grandfathers were out there, blood, sweat and tears, making sure those crops are going to grow so you and I would have fruits vegetables. And let me tell you, they are shutting it down because they think the minnow could get caught or does get caught in the pumps.

Now, they're pumping the water out into the Pacific Ocean instead of streaming it down to the farmers, who live in the valley.

HANNITY: And they're all losing their jobs.

EARHARDT: They're all losing their jobs. Representative Nunes says up to 80,000 jobs could be lost. So we're talking about lots of jobs. We went to the food bank, the line was wrapped around the block because people don't have food.

HANNITY: And all they've got to do is turn the water back on.

EARHARDT: Right. All they have to do.


EARHARDT: And you now what? Now we're going to have to get our fruits and vegetables from other countries, from Mexico and from elsewhere.

HANNITY: Might as well. We get our oil and everything else. I'll tell you, this is madness. This is madness. Great report.

EARHARDT: It’s fish verses families.

HANNITY: It really is. They're choosing the fish. Two-inch fish.

EARHARDT: Two-inch minnow. Didn't you used to fish with them? Bait fish.

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